{"id":34960,"date":"2026-07-20T19:39:19","date_gmt":"2026-07-20T19:39:19","guid":{"rendered":"https:\/\/bitunikey.com\/news\/genius-act-has-faltered-in-implementation-former-sec-counsel-says\/"},"modified":"2026-07-20T19:39:48","modified_gmt":"2026-07-20T19:39:48","slug":"genius-act-has-faltered-in-implementation-former-sec-counsel-says","status":"publish","type":"post","link":"https:\/\/bitunikey.com\/news\/genius-act-has-faltered-in-implementation-former-sec-counsel-says\/","title":{"rendered":"\u2018GENIUS Act has faltered in implementation,\u2019 former SEC counsel says"},"content":{"rendered":"<p><\/p>\n<div class=\"post-detail__content blocks\">\n<p class=\"is-style-lead\">U.S. regulators have missed the GENIUS Act\u2019s one-year rulemaking deadline, leaving the federal stablecoin framework awaiting final implementation even as industry participants say the law has already accelerated institutional adoption.<\/p>\n<div id=\"cn-block-summary-block_0c5b53b01db00f71ad47abb418271d5e\" class=\"cn-block-summary\">\n<div class=\"cn-block-summary__nav tabs\">\n        <span class=\"tabs__item is-selected\">Summary<\/span>\n    <\/div>\n<div class=\"cn-block-summary__content\">\n<ul class=\"wp-block-list\">\n<li>U.S. regulators missed the GENIUS Act\u2019s one year deadline to finalize key stablecoin rules, leaving several major proposals still under review.<\/li>\n<li>Industry participants said the law has already encouraged institutional stablecoin adoption, but unfinished rulemaking continues to create compliance uncertainty.<\/li>\n<li>Former SEC counsel Ashley Ebersole said the GENIUS Act established a strong legal framework but has fallen short in implementation because regulators missed the deadline.<\/li>\n<\/ul><\/div>\n<\/div>\n<p><!-- .cn-block-summary --><\/p>\n<p>According to <a rel=\"nofollow\" target=\"_blank\" href=\"https:\/\/www.federalregister.gov\/documents\/2026\/03\/02\/2026-04089\/implementing-the-guiding-and-establishing-national-innovation-for-us-stablecoins-act-for-the\" target=\"_blank\" rel=\"nofollow\">federal rulemaking records<\/a> and regulatory proposals reviewed after the July 18 deadline, none of the key agencies charged with implementing the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act have completed their final rules despite Congress requiring them to do so within one year of the law\u2019s enactment.<\/p>\n<p>President Donald Trump signed the GENIUS Act into law on July 18, 2025, creating the first standalone federal framework for payment stablecoins in the United States.\u00a0<\/p>\n<p>The legislation established reserve, redemption, disclosure, licensing and supervisory requirements for issuers while directing the Office of the Comptroller of the Currency, Federal Reserve, Federal Deposit Insurance Corporation, National Credit Union Administration, Treasury Department, and state regulators to complete implementing regulations through the notice-and-comment process within one year.<\/p>\n<p>Although the deadline has now passed, the statute does not say that missing it delays the law\u2019s effective date or suspends its requirements. Instead, much of the framework remains defined by the legislation itself while agencies continue working on the operational details that will govern compliance and supervision.<\/p>\n<p>For companies building around stablecoins, however, the regulatory delay has become one of the biggest talking points one year after the law\u2019s passage.<\/p>\n<h2 class=\"wp-block-heading\">Legal clarity has improved but implementation remains unfinished<\/h2>\n<p>Speaking to crypto.news, Diogo Cassinelli, sales and partnerships manager at Trace Finance, said the anniversary serves as an opportunity to evaluate both the progress made under the GENIUS Act and the issues that remain unresolved.<\/p>\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p>\u201cThis week marks one year since the GENIUS Act was signed into law, and the anniversary is a useful checkpoint to reflect on how far the industry has come, and where we still need to go,\u201d Cassinelli said.<\/p>\n<\/blockquote>\n<p>While he described the creation of a federal framework for stablecoin issuance as \u201can incredible milestone,\u201d he argued that operational questions extending beyond issuance continue to slow adoption.<\/p>\n<p>According to Cassinelli, the unresolved issue is how stablecoins move through the traditional banking system and who ultimately bears responsibility for those transactions. He said this gap is one reason lawmakers and industry participants are paying close attention to the proposed Digital Asset Market Clarity Act, or CLARITY Act, which is expected to establish a wider market structure framework for digital assets.<\/p>\n<p>Cassinelli said regulatory uncertainty has not stopped fintech firms from building cross-border payment products, but it has made expansion slower and more expensive because every banking relationship requires institutions to conduct their own compliance assessment instead of relying on a common federal standard.<\/p>\n<p>\u201cThe process alone adds months to timelines that should take weeks,\u201d he said, adding that those costs increase whenever companies enter new markets or onboard new banking partners.<\/p>\n<p>Looking ahead, Cassinelli said passage of the CLARITY Act would allow banks and payment providers to approve stablecoin-related services more quickly because compliance expectations would already be established at the federal level.<\/p>\n<p>\u201cA definitive framework means banks and payment providers can say yes faster,\u201d he said. <\/p>\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p>\u201cCLARITY gives a definitive path for large institutions to move money with stablecoins, while also giving startups a clear map to build for these institutions.\u201d<\/p>\n<\/blockquote>\n<h2 class=\"wp-block-heading\">Agencies continue working through proposed rules<\/h2>\n<p>Several of the largest implementing rules remain at the proposal stage despite the statutory deadline.<\/p>\n<p>The OCC previously proposed standards covering reserve assets, capital, liquidity, custody, reporting and risk management for issuers under its supervision. The FDIC later released its own proposal addressing prudential standards, reserve requirements, redemption, custody, capital treatment and the handling of tokenized deposits held by supervised institutions.<\/p>\n<p>Meanwhile, the NCUA published separate licensing and operational proposals, with comments on its latest package closing only one day before the July 18 deadline, making completion of the rule impossible through the normal rulemaking process.<\/p>\n<p>Treasury has yet to finalize guidance explaining when state stablecoin frameworks qualify as \u201csubstantially similar\u201d to the federal regime, an important decision because issuers with no more than $10 billion in outstanding stablecoins may remain under state supervision if their regulatory framework receives Treasury certification.<\/p>\n<p>At the same time, the Federal Reserve, FinCEN, OCC, FDIC and NCUA have jointly proposed customer identification requirements for primary-market participants, while additional anti-money laundering and sanctions proposals from FinCEN and the Office of Foreign Assets Control also remain under review.<\/p>\n<p>Because several comment periods extend into August, at least part of the regulatory framework cannot be finalized before the one-year deadline.<\/p>\n<h2 class=\"wp-block-heading\">Regulatory delays haven\u2019t slowed industry growth<\/h2>\n<p>For investors, the first year of the GENIUS Act has still produced measurable changes across the stablecoin market.<\/p>\n<p>Alex Witt, general partner at Verda Ventures, told crypto.news the legislation has already accomplished one of its main objectives by encouraging institutional participation.<\/p>\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p>\u201cA year in, the GENIUS Act has clearly succeeded as a legitimization signal,\u201d Witt said.<\/p>\n<\/blockquote>\n<p>He pointed to stablecoin market capitalization exceeding $300 billion, transaction volumes increasing roughly fourfold, institutional entrants including Fidelity and Ripple obtaining charters, and Tether launching its USA\u20ae product through Anchorage as evidence that adoption has continued despite unfinished regulations.<\/p>\n<p>At the same time, Witt argued that implementation has \u201cbadly lagged\u201d because six federal agencies were expected to finalize rules by July 18 but have yet to complete any of them.<\/p>\n<p>According to Witt, the absence of final regulations means the industry continues operating under legacy disclosure practices while charter approvals and Federal Reserve access decisions are occurring before the complete regulatory framework is in place.<\/p>\n<p>\u201cThe unresolved pieces, the leaky yield ban pushing capital offshore and the January 2027 backstop effective date, mean the Act\u2019s real test is still the next six months, not the year behind it,\u201d he said.<\/p>\n<p>Offering more insights on the matter, Ashley Ebersole, co-founder and chief legal officer of tx and a former senior counsel at the U.S. Securities and Exchange Commission, drew a similar distinction between the legislation itself and its implementation.<\/p>\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p>\u201cOne year post-enactment, it\u2019s fair to say the GENIUS Act delivered a framework that established structural mandates, but has faltered in implementation,\u201d Ebersole told crypto.news.<\/p>\n<\/blockquote>\n<p>According to Ebersole, codifying payment stablecoins into federal law gave institutions the confidence needed to increase participation. She said stablecoin supply has expanded by approximately $55 billion since the law took effect, while tokenized U.S. Treasury assets have grown from about $3.9 billion to nearly $9 billion. She added that six separate real-world asset categories have now exceeded $1 billion in value, attributing part of that growth to the regulatory certainty created by the Act.<\/p>\n<p>Ebersole nevertheless described the rulemaking delays as the legislation\u2019s biggest execution challenge. She noted that agencies missed the one-year deadline despite Congress requiring implementation within that period, leaving eight major proposals still awaiting completion.<\/p>\n<p>According to Ebersole, many institutions aligned their compliance planning with the original legislative timeline, making the administrative delays a setback even though the law contains a January 18, 2027, statutory backstop for implementation.<\/p>\n<p>She also said stablecoins have become an essential settlement layer for tokenized assets, arguing that the legislation has reduced uncertainty surrounding long-term institutional blockchain infrastructure.<\/p>\n<p>Ebersole identified the prohibition on issuer-paid yield as one of the biggest questions entering the framework\u2019s second year.<\/p>\n<p>\u201cA definitive question for 2027 concerns the yield prohibition,\u201d she said, explaining that decentralized finance protocols and wrapped products may continue offering interest-like returns through other mechanisms even though the GENIUS Act and Europe\u2019s Markets in Crypto-Assets (MiCA) framework prohibit issuers from paying yield directly to token holders.<\/p>\n<p>Jay File, chief executive and chief financial officer of Nasdaq-listed Lite Strategy, also pointed to the international regulatory environment rather than the delayed rulemaking alone.<\/p>\n<p>\u201cThe GENIUS Act is the first serious federal framework for stablecoins,\u201d File told crypto.news.\u00a0<\/p>\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p>\u201cPaired with MiCA\u2019s enforcement baseline in Europe, we\u2019re approaching a moment where the regulatory risk that caused institutional hesitation is finally being removed.\u201d<\/p>\n<\/blockquote>\n<p>File added that regulatory developments across multiple jurisdictions are moving digital assets toward \u201clegitimacy, clarity, and institutional access,\u201d which he described as beneficial for the industry.<\/p>\n<p>Attention is now beginning to move toward the proposed CLARITY Act, which lawmakers continue negotiating in Congress. While discussions over ethics provisions and other outstanding issues remain unresolved, supporters, including Rep. Bryan Steil, have argued that the legislation would establish clearer rules for the wider digital asset market after the GENIUS Act created the first federal framework for payment stablecoins.<\/p>\n<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"<p>U.S. regulators have missed the GENIUS Act\u2019s one-year rulemaking deadline, leaving the federal stablecoin framework awaiting final implementation even as industry participants say the law has already accelerated institutional adoption.&hellip;<\/p>\n","protected":false},"author":1,"featured_media":23589,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-34960","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-cryptocurrency"],"_links":{"self":[{"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/posts\/34960","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/comments?post=34960"}],"version-history":[{"count":1,"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/posts\/34960\/revisions"}],"predecessor-version":[{"id":34961,"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/posts\/34960\/revisions\/34961"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/media\/23589"}],"wp:attachment":[{"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/media?parent=34960"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/categories?post=34960"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/tags?post=34960"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}